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December 3rd, 2012
The lead article in today’s New York Times, “UBS is Reported to be Near Deal on Rate Rigging,” represents a welcome accountability for the bank’s role in rate rigging, an effort to illegally affect benchmark rates that ultimately affect consumers in the rates they pay for mortgages, credit-card balances and other loans.
The benchmark primarily concerns Libor, the London interbank offered rate, and Barclay’s Bank has previously settled regarding the same issue, to the tune of $450 million. According to the article, UBS will be held to a similar penalty.
This decision, of course, does not mean that the inquiry is over. Regulators are also looking into other banks as well. The New York State Attorney General has subpoenaed 16 banks regarding the rate-rigging scandal, and future prosecutions may come from these actions, too. And criminal inquiries may be on the horizon as well.
It is refreshing to see the Justice Department and other global regulators, such as Great Britain’s Financial Services Authority, look into these wrongdoings. So many people have suffered from these abuses, but the long arm of the law is finally catching up to them.
As the U.S. recovery from its long recession starts to accelerate, one hopes that financial institutions serve as reliable, honest anchors of that recovery, not as an impediment to it.
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